Fraudulent Covid Aid Drove Up U.S. House Prices, Report Says
Fraud against the Paycheck Protection Program was widespread enough to bump up real-estate prices within certain U.S. ZIP Codes, researchers at the University of Texas concluded, blaming the abuse on some of the financial technology companies that provided the loans.
House prices in ZIP Codes with high fraud were 5.7 percentage points higher than in low-fraud ZIP Codes in the same county, even when controlling for a range of other possible factors, researchers at the University of Texas at Austin’s McCombs School of Business said in a study released Thursday.
Academics, lawmakers and law enforcement have focused on high levels of fraud targeting the program, which was put in place in 2020 to help shore up the finances of businesses facing uncertainty because of the Covid-19 pandemic. But less attention has been paid to impacts fraud might have had on the wider economy beyond government coffers.
